2. Alternatives to Foreclosure (Cont'd):
4. Refinance: If you cannot do a loan workout or loan modification with your existing lender, you may still be able to
refinance your loan with your lender or another lender. Although low FICO scores, low appraisals, and the lack of income
are common obstacles to refinancing distressed loans, whether you qualify for a refinance depends on your individual
circumstances. You may also be eligible for federal assistance through the Home Affordable Refinance program for up to
125% of the property's value if you currently have a Fannie Mae or Freddie Mac loan, or the Hope for Homeowner
program for a FHA-insured fixed-rate refinance up to 96.5% of the property's value, but other terms apply.
5. Deed-in-Lieu of Foreclosure: A deed-in-lieu of foreclosure is a voluntary agreement between a borrower and
lender for the borrower to give title to a property to the lender in full satisfaction of the loan secured by that property. Your
lender may look favorably at a deed-in-lieu of foreclosure because it will not have to spend time and money pursuing
foreclosure.
6. Bankruptcy: Bankruptcy is a federal court proceeding for settling your debts with your creditors under a judge's
supervision. If you face foreclosure, the filing of a bankruptcy case may provide an "automatic stay" to temporarily stop
the foreclosure proceedings. If, however, you file for liquidation under Chapter 7 of the Bankruptcy Code, the court may, in
time, lift the automatic stay to allow the mortgage lender to resume its foreclosure proceedings. Alternatively, if you file
under Chapter 13, you may be able to keep your property, but you must generally repay the overdue amount in a
three-to-five year plan along with your regular mortgage payments. For more information on bankruptcy, you may go to
http://www.uscourts.gov/bankruptcycourts/bankruptcybasics.html.
7. Other Alternatives: There are many other alternative to foreclosure. You may be able to borrow money from
family or friends. You may be able to supplement your income by renting out a bedroom or getting a second job. You may
have a struggling small business that qualifies for an interest-free, deferred-payment America's Recovery Capital (ARC)
loan up to $35,000 from the U.S. Small Business Administration. If your lender fails to follow proper foreclosure
procedures, you may be able to file an injunction to stop the process. If you have legitimate discrepancies in your loan
documents, you may be able to sue your lender. You may also be able to come up with some other alternatives to
foreclosure not mentioned here. For any of these alternatives to foreclosure, carefully consider their pros and cons,
including possible credit, tax, legal, and other consequences.
Contact a Professional for Your Real Estate Needs.
Agent: Ronny Budiutama Phone: 415.242.8177 Fax: 415.759.2200 Prepared using zipForm® software
Broker: Intero Real Estate Services 1788 19th Avenue San Francisco, CA 94122